…because it's our money

Appointment of a new Indian ED at the World Bank raises a few Questions

~ Joe Athialy

With Subhash Chandra Garg assuming charge as secretary of the Department of Economic Affairs (DEA) in the Finance Ministry, the position of the Indian Executive Director (ED) at the World Bank has fallen vacant. The 1983-batch IAS officer of Rajasthan cadre, Garg was the ED at the World Bank from Nov 2014 until June 2017.

Appointments Committee of Cabinet decides appointment of important posts under the Government of India, including ED at the World Bank. While in the past the Appointments Committee had the Prime Minister as its Chair and the Ministers for Home and in-charge of the concerned ministry, with a notification in mid-2016, the Appointments Committee is reduced to only the Prime Minister and Home Minister.

There are currently 25 EDs on the board, one each for the seven largest shareholders at the Bank – US, Japan, Germany, France, UK, China and Saudi Arabia. Other countries are grouped into constituencies, each represented by an executive director. Indian ED is in charge of Bangladesh, Bhutan and Sri Lanka, apart from India.

The EDs are based at the World Bank Group’s headquarters in Washington DC. It is responsible for policy decisions affecting the World Bank Group’s operation, and approval of the International Bank for Reconstruction and Development (IBRD) loan and guarantee proposals and International Development Association (IDA) credit, grant and guarantee proposals.

There are a few pertinent questions surrounding the appointment and functioning of positions like that of World Bank ED:

Shouldn’t the elected representatives of people have a say in the appointment of an ED at any of the multilateral institutions, who represents the interests and positions of the country?

Shouldn’t s/he be guided by the wise counsel of the Parliament, for the positions s/he takes at the Board, given that the positions could have far reaching impact for the country for a long time to come? (In US, Congress provide “legislated instructions” to the ED representing the US at the Bank).

Shouldn’t s/he be transparent and accountable to the Parliament for the positions s/he takes at the Board?